Mitt Romney to students who want to start their own business: Borrow money from your parents

Mitt Romney has some simple advice for students who want to start their own business: Just borrow money from your parents.

The presumptive Republican presidential nominee made the suggestion Friday during a pit stop at Otterbein University in Ohio.

Romney pointed to sandwich chain Jimmy John’s, in which owner Jimmy John Liautaud borrowed $20,000 from his father (in return for 48% of the business) to start the shop.

“We’ve always encouraged young people: Take a shot, go for it. Take a risk, get the education, borrow money if you have to from your parents, start a business,” said Romney, whose wealth is estimated upwards of $250 million.

He has been battling the perception he’s out of touch with regular Americans.

What is really amazing is that he doesn’t get that the years right after the kids have just graduated from college is when middle class parents are the most broke. Just when a kid might be most filled with ideas for a business, and free of family obligations that make trying to get a business going realistic and young enough so that trying to make it without health insurance is dangerous, but safer than it will be later, is when they can’t count on their parents having any resources to share other than a place to crash in their old room.

But its not just Romney who thinks this way. When working on my Masters I met a young gal who owned 4 Subway sandwich shops. When I asked the 22 year old, who had never held a job in her life, how she pulled that off, the answer was simple: She borrowed the money (about 100K) from her mom and she bought the shops from an uncle (who needed the 100K for something else). The shops were established and in good locations that generated a steady positive cash flow. She thought this was perfectly normal and average (probably because all her friends did the same thing)

Nothing beats being born on 3rd base. Except maybe winning the lotto. Of course you have 1 in 176 million chance of winning the Powerball jackpot. I think the odds of being born on third base are better than that.

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Comment by Blue Skye

2012-04-29 10:47:13

My Dad’s biggest gift to me was enthusiatic encouragement. I don’t think he ever loaned me anything after that one time I left his crosscut saw out in the yard overnight.

Comment by polly

2012-04-29 11:23:28

Actually being born on third base is way better. Most lotto winners don’t know how to handle large sums of money. Being born on third base comes with some basic information about that and an understanding of what level of consumption a fixed amount of cash can support. It is possible to acquire that knowledge without being born to it (I did when I spent those years in NYC), but not a lot of lotto winners have it. It is also possible to overspend on a large income, but being born on third base should at least give you the tools for not doing it.

Comment by In Colorado

2012-04-29 11:53:40

I think most of us on the blog would manage to not piss away a lotto jackpot, but your point is well taken.

Comment by polly

2012-04-29 12:10:22

I don’t think a lot of us on this blog play the lottery. You know what they call it, right? A tax on stupid people.

I suspect you would also find the ‘lotto tax’ is highly regressive, if anyone bothered to look at the data. You won’t probably find too many members of the 1% playing the lotto, but I am quite sure a disproportionate share of the bottom 50% regularly play compared to the top 50%.

Another way to look at this is that income level and understanding of basic probability show a high level of negative correlation.

Comment by nickpapageorgio

2012-04-29 21:23:00

““A tax on stupid people.””

Does it make you feel better about yourself to say that? Taking a $1 shot at millions regardless of the odds can be fun sometimes. You’ve heard of fun…right? I go to Vegas a couple times a year and yes…hold on…I gamble. I know the odds suck, but I have a good time drinking beer, watching people and taking a chance. Lighten up.

WHAT happens to a two-party political system when one party goes mad? That is the question posed in a powerful and angry new book by two scholars at two respected think-tanks, Thomas Mann of the Brookings Institution and Norman Ornstein of the American Enterprise Institute. The book’s cheery title is “It’s Even Worse Than It Looks” (Basic Books), and its argument is encapsulated in its subtitle: “How the American constitutional system collided with the new politics of extremism”.

The think-tankers’ thesis is that America’s political parties have become as vehemently adversarial as the parties in a parliamentary system. But whereas a parliamentary system allows the majority to rule while the minority bides its time, America’s separation of powers seldom gives one party the power to rule unconstrained. So the emergence of parliamentary-style parties in America is a formula for “wilful obstruction” and gridlock.

This diagnosis has become commonplace since the tea-tainted tide that swept a stroppy Republican majority into the House of Representatives in the mid-term elections of 2010, bringing on said gridlock. Indeed, Messrs Mann and Ornstein spotted the trend in an earlier book about Congress, “The Broken Branch”, in 2006. The added twist now is their claim that the Republican Party has become “an insurgent outlier—ideologically extreme; contemptuous of the inherited social and economic policy regime; scornful of compromise; unpersuaded by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition.”
…

True. In fact, I am pretty sure we could find plenty of examples that apply to Dumbocrats!

Comment by RioAmericanInBrasil

2012-04-29 13:58:51

“unpersuaded by conventional understanding of facts,”

That can mean so many things, I had LOL.

…….I am pretty sure we could find plenty of examples that apply to Dumbocrats!

Really? OK let’s play a game.
Fact: It is one of the major talking points of the Repubs that America is taxed too much. But the FACTS clearly show that America is a low taxed country. Now here’s about 10 charts using OMB,IRS,GAO and CBO numbers proving America is taxed low. These are the facts but the Repubs remain “unpersuaded by conventional understanding of (the) facts,”

Game’s question: Which issue as major as the tax issue discussed above are the Democrats “unpersuaded by conventional understanding of facts,”? Which issue?

No. The Repubs ignore facts way more than Dems and I can post more examples proving it.

Comment by Bill in Carolina

2012-04-29 16:21:21

I love it! These liberal think tankers think they can completely avoid compromising on, or even discussing, the issue of the proper size of the public sector by stating that it’s a “fact” that bigger government is the only answer. Any contrary opinion is pure, evil obstructionism. LOLOLOL!!!

When did it become a universally accepted “fact” that as a country we need to spend ever more money on the public sector?

Scornful of compromise? Which house of congress is so against compromise that they haven’t even offered up their version of a federal budget for the last three years?

Comment by RioAmericanInBrasil

2012-04-29 17:16:24

These liberal think tankers think they can completely avoid compromising on, or even discussing, the issue of the proper size of the public sector by stating that it’s a “fact” that bigger government is the only answer.

Liberal think tankers? The American Enterprise Institute? I think not. And are we not cutting on many governmental levels?

Government cutbacks slice into economy’s growth

WASHINGTON — The U.S. economy’s weaker-than-expected growth in the first three months of this year renewed concerns Friday that the nation’s fragile recovery might stall. Much of the drag against growth reported Friday came from falling government spending,….

….When combined with the steep losses of jobs in federal, state and local governments, Friday’s GDP numbers raise questions about the course of federal budget policies that will be argued throughout this presidential election year. While Democrats call for deeper cuts in military spending and Republicans want to reduce spending on social programs, both options would slow the already struggling U.S. economy.

“But the FACTS clearly show that America is a low taxed country. Now here’s about 10 charts using OMB,IRS,GAO and CBO numbers proving America is taxed low.”

I’m not one of those who thinks we’re grossly overtaxed, but a fiscal conservative could make an excellent case that how our taxes compare to that of other countries is irrelevant to the discussion.

Comment by RioAmericanInBrasil

2012-04-29 18:06:48

a fiscal conservative could make an excellent case that how our taxes compare to that of other countries is irrelevant to the discussion

It is not irrelevant to the discussion of US corporate effective tax rates being lower than other countries -therefore negating the misleading argument that “high” US corporate tax rates make us uncompetitive.

Also they could also not make irrelevant the fact that as a percentage of GDP, federal tax receipts are at a 50 year low or that top marginal tax rates and investment income taxes are at historical lows.

“So our corporate tax rate (in 2011), effectively, in terms of taxes paid for the United States, was around 12 percent, which is well below those existing in most of the industrialized countries around the world. So it is a myth that American corporations are paying 35 percent or anything like it…Corporate taxes are not strangling American competitiveness.” Warren Buffett

Hmm I call the responses Romney bashing. People borrow from relatives all the time. $20K is not a lot of money. If someone starts a sandwich shop that someone probably did not go to college. Or if they did and can’t find suitable employment with their underwater basket weaving degree then they’ve figured out they need to create their own job.

A lot of the economic angst in the country today is people who think they deserve to live better (on a material level) than their actual production warrants. 1950s US middle class lifestyle was I think an economic /historical aberration. There is a global labor glut. It’s causing wages to revert to historical levels - e.g. lower.

In my post yesterday I mentioned the old TV show the Honeymooners (Jackie Gleason & Audrey Meadow.) Rember their modest aparment? That’s still better than most people live today. All throughout history people have substitanced farm / worked.
A lot of people have unrealistic expecations and are in for a rude awakening.

Good point. I never got a loan from my parents, but they did give me a good deal on my first car. In turn, I bought my parents a new TV and new roof for their house. My sisters all had financial help. My parents made themselves doormats.they went without a lot of things in order to favor us. I am forever thankful. Their biggest gifts were the way they instilled financial sense in me, and a strong dose of skepticism. Although staunch Reagan Republicans, they were aware of scams by businesses, including big businesses, with bureaucracies so huge that any customer was treated like a peon. And no, I am by no means against capitalism, just against socialism in either government or business that ignores individuality.

1950s US middle class lifestyle was I think an economic /historical aberration. There is a global labor glut. It’s causing wages to revert to historical levels - e.g. lower.

The official line of the 1%ers and their defenders. The US middle class lifestyle of the post war years was the result of Keynesian economics and a country full of returning combat veterans who didn’t fight their way across Iwo Jima so they could come home and help the mega-rich get even richer at their expense. It’s achievable again, if we don’t listen to the propaganda put out by the elite.

Or is the mega-rich getting ever richer as everyone else falls by the wayside also one of those historical inevitabilities? Seems like they could at least share in the pain of their fellow countrymen, no? Maybe pay taxes like they used to, when we coincidentally had a middle class in this country.

I am not saying the disappearance of the 1950’s level of material wealth for everyday working people is good. I just saying it’s probably the future. My own well paying white collar job can be done by someone in a developing market for much less. And very well may be. I am also saying the standard of living as portrayed in that old TV series is probably better than many people in world have now. Shelter, indoor plumbing, heat, ample food.

My take on WWII is that was as much about political and religious freedom as economic freedom. More along the lines that gee maybe we should not slaughter someone cause they go to a temple rather than a church or that the go to church all. And less about Joe on the assembly line is being ripped off by “the man” since he gets only four weeks a year vacation instead of five. And he deserves a new car every other year, etc…

As far as 1%ers that probably includes many on this blog if you measure by income and even more if you measure by savinging and assets.

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Comment by alpha-sloth

2012-04-29 20:47:14

I just saying it’s probably the future.

Yeah. That’s the line we often hear.

Shelter, indoor plumbing, heat, ample food.

The 99% should be happy with that, and shut up.

And less about Joe on the assembly line is being ripped off by “the man” since he gets only four weeks a year vacation instead of five.

Those darn unions again, and their belief that the little guy should have a reasonably enjoyable life.

As far as 1%ers that probably includes many on this blog if you measure by income and even more if you measure by savinging and assets.

$500,000 to $1.3 million a year in income (which is for little people anyway), depending on sources. I’ll bet that’s rather few of us. Oh, and $19 million in assets. Let’s not fool ourselves- or be propagandized- into thinking somehow we are the 1%.

1950s US middle class lifestyle was I think an economic /historical aberration.

I think so too. I also think the period of time when the American working man could eat 3 meals a day was an economic/historical aberration. And the period when an American could make a living wage was an economic/historical aberration.

In fact when you really think about it, and look at the history of America, the period of 1865-2012 that had no slavery was probably an economic/historical aberration.

Yes, it does appear that a lot of people think that America was a better place 100 years ago. In case you never spoke to your grandparents about those days, I heard stories from mine. Take my word for it, we don’t want to go back to the way things were back then.

Bank investors’ anger at bank pay is boiling over. Less than two weeks after a third of Citigroup shareholders threw the company’s remuneration report back in its face, shareholders at Barclays and Credit Suisse have done exactly the same. Reforms that now flow from what is a genuine “shareholder spring” could be far reaching.

Barclays only has itself to blame for its embarrassing protest vote. Chief Executive Bob Diamond described 2011 returns as “unacceptable”, but then proceeded to be granted 80 percent of his maximum 3.4 million pound bonus. It prompted one irate shareholder at the bank’s annual general meeting in London on April 27 to sum it up thus: Barclays, he said, was a cow milked for its officers and staff.

Thank, Cat. I was going to point that out, but you beat me to it. I do see it as hopeful that the mutual fund companies and pension funds and the rest thoguht that even a purely symbolic gesture was a good idea. Not very hopeful. A little like a smoker saying they really ought to cut back from two packs a day to two packs a day less two and then not doing it, but better than absolutely nothing.

Oh, and if anyone cares at all, Basil Twist (puppeteer) is a genius. I almost turned around and bought a ticket to the second show just to see his part again, but most of the rest was sort of lame.

His interpretation of Berlioz’s Symphonie Fantastique (which is what brought him to fame!) is pure genius.

I know which theater it’s playing at. I walked past it twice when I was in DC and I had lunch at that corner.

Comment by polly

2012-04-29 09:36:39

Symphonie Fantastique was in College Park. Are you thinking about Dogugaeshi? That was at Studio (14th street). Dogugaeshi was amazing. And the performers let us go backstage aferwards to look at the set up.

Or maybe Arias with a Twist at Woolly Mamouth (downtown)? Haven’t seen that one yet, though it is on my radar.

This was a puppetry slam out at Glen Echo Park. One night only. And he did a bit with a short strung marionette called Stick Man. One puppeteer, one marionette, magic.

So far, several hundred military members who lost homes to illegal foreclosure actions by big banks and mortgage servicers have received settlements of $116,785 apiece for economic loss and emotional distress.

Thousands of vacant homes across South Florida have deteriorated into eyesores that violate local health and safety laws, depress property values and spread blight. The owners of these homes: some of the world’s biggest banks.

In an extensive investigation of foreclosed homes plaguing our neighborhoods, the Sun Sentinel found more than 10,300 property code violations lodged against banks in 10 South Florida cities since 2007.

The Sun Sentinel, in its investigation, identified banks as owners only in cases in which they held title to the property. But the newspaper also found that years after launching foreclosure suits, some banks or their agents balk at completing the process and taking title to homes that are unlikely to sell for much. That practice fuels a separate legal “limbo” problem that traps thousands of vacated homes in years-long court cases, often as they tumble into ruin. Banks pay little price for letting neighborhoods rot.

There’s what’s held out for public consumption in an election year, and there is reality. We’re told these ‘banks’ are working to keep people in their houses. Why, they are offering them $20,000 to do a short sale. Lowering the amount owed. Renting them the house for cheap, or letting them live there for years. Most of the time this just isn’t true.

It’s not banks, it’s asset managers, in most cases representing trusts, using big banks as loan servicer’s. I’ve been told on certain safety issues, ‘the client (asset manager) doesn’t want to spend any more money on this property.’ And they won’t; not one more dime. But if they think it will bring in more money at sale, a complete rehab is ordered.

IMO what we are seeing here is an example of most people being convinced a situation that hurts them is for their benefit, or the greater good or some altruistic notion. So we use tax dollars to go along with market manipulation that keeps prices higher than it would otherwise be. Where’s that extra money going?

The govt backs 90%+ of the loans, because the market knows this paper is just as bad as 2005. Interest rates and underwriting standards are kept low, by the govt, to suck in people who shouldn’t qualify. Did you know we have a govt program that is no doc now, aimed at over 100% LTV borrowers? And we don’t know how much over 100% LTV it is because there is no appraisal. How can that go wrong?

Some will say, the homeowners are in the majority and the govt will keep them from being hurt. That isn’t what I’ve seen, and I drove across the country taking photos of abandoned houses and foreclosures. The homeowners are seeing their ‘values’ degraded by the neglected houses on the block. And if these ‘homeowners’ need to sell their house, the lenders probably have a house nearby priced below the market. And after they sell that one, they will pull out another, also nearby.

This process isn’t ‘keeping prices up’. It’s merely slowing the decline and manipulating inventory so the asset managers can maximize returns. And almost everyone involved is paying some price for it.

More examples; we’ve all read many accounts of some group or program helping an 70 or 80 YO widow stay in her home. It’s never asked, why does she still have a mortgage? Why elderly people need loans to survive is the question we should be asking.

And of course, this is just the situation that gets in the paper. Others, more common, don’t. Last week I did an initial services call on a newer double-wide a couple of hours away. They took the well pump, appliances; but left a mountain of trash, over 60 gallons of paint/oil/chemicals and 24 tires. Landfills won’t take some of that stuff anymore. Here’s the kicker; I found out that this was the third time they done this.

Isn’t that the libertarian mindset? That people should behave that way?

I find what libertarians believe almost mind-boggling.

They actually think that at first people will set up some idealized system and then after that, people will behave in their own self-interest while the rules magically propagate themselves.

What an idealistic notion!

Isn’t it easier to figure out that people will ALWAYS set up the system in their own best interests?

They’re all navel-gazing idealists down to the last person, and I speak as someone who’s hosted more than a few editors of Reason magazine at his parties.

Comment by Happy2bHeard

2012-04-29 10:57:24

“More examples; we’ve all read many accounts of some group or program helping an 70 or 80 YO widow stay in her home. It’s never asked, why does she still have a mortgage? Why elderly people need loans to survive is the question we should be asking.”

I suspect the widow and her deceased husband mortgaged the house to cover expenses of his final illness.

Comment by Happy2bHeard

2012-04-29 11:13:57

“They’re all navel-gazing idealists down to the last person”

Maybe not navel gazing, but I agree with idealists. I think they also believe that they are the winners in a meritocracy and so favor such a system.

Comment by scdave

2012-04-29 11:15:40

I suspect the widow and her deceased husband mortgaged the house to cover expenses of his final illness ??

Sadly you may be correct…

Comment by aNYCdj

2012-04-29 11:21:23

This is exactly one of the few reasons why we as Americans should just eat the loss and let her stay in the house till death…..

I suspect the widow and her deceased husband mortgaged the house to cover expenses of his final illness.

Comment by In Colorado

2012-04-29 11:22:57

“I suspect the widow and her deceased husband mortgaged the house to cover expenses of his final illness.”

You’d think that a lifetime of paying insurance premiums would protect households against getting financially skewered by end-of-life medical expenses, but you’d be wrong.

Comment by Montana

2012-04-29 12:45:22

I suspect the widow and her deceased husband mortgaged the house to cover expenses of his final illness.

Okay I don’t get this, but I have experience with only two cases: Two elderly guys, one my father, both had Medicare and medigap policies. Between the two policies they didn’t have to pay medical expenses. In those days they did pay for meds and miscellaneous stuff. It helped that they had someone to manage the paperwork.

A person would have to be crazy not to get the medigap part because copays can wipe you out.

Comment by alpha-sloth

2012-04-29 13:50:23

They’re all navel-gazing idealists down to the last person,

I’ve always said libertarianism is as idealistic as communism. The idea that we’ll have absolute, inviolable property rights immediately brings up a host of problems easily comparable to those arising from the idea of ‘from each according to his abilities, to each according to his needs’. (I also think it’s hard to deny that communism is closest to true christianity.)

Comment by Bill in Los Angeles

2012-04-29 16:40:54

So execute all us libertarians then. Oh wait. Opposing the initiation of force is why we became libertarians in the first place you commies. Excuse ME!

Comment by Happy2bHeard

2012-04-29 22:22:49

“So execute all us libertarians then.”

That’s a bit over the top. Nobody said anything about killing. Or even re-educating.

“Did you know we have a govt program that is no doc now, aimed at over 100% LTV borrowers? And we don’t know how much over 100% LTV it is because there is no appraisal. How can that go wrong?”

I mistakenly assumed that government-sponsored subprime lending would go away after Fannie Mae and Freddie Mac collapsed. Now I see that government-sponsored subprime lending has managed to outlive the defunct (zombiefied) GSEs.

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Comment by Neuromance

2012-04-29 20:07:33

Money - revenue and contributions - keeps politicians in power.

They’ll do whatever they need to in order to keep that money coming in. The FIRE sector is, as far as I can tell, the biggest contributor to federal and probably state politics for a few decades now. So funneling public monies towards this sector through through targeted agencies means that it keeps coming back to them.

We do have the vote. The only real reform of this system is going to be the flushing out of Congress, and some kind of political finance reform. And the latter cannot happen without the former.

I met a guy a couple of years ago that was formerly an executive at one of the GSEs. He said that every once in a while there would be a new congressperson who would come out vocally about reducing the GSE’s power in the mortgage market.

You know what the GSE would do in response?

Open a local lending office in that congressperson’s district.

Next thing you know the aforementioned congressperson would be a part of some photo ops with someone crying who just bought a home with some cheap GSE loan.

No more opposition from that congressperson…

The best time to get the GSE’s wound down is now when these congressmen have some public backing to do so. Unfortunately they used the public outrage to push through Dodd/Frank, which won’t work as it should have, when they should have used part do the outrage to put Fannie/Freddie on a glide path to oblivion. I guess the congressmen want some more photo ops.

Let the Deadbeat Special shine some blight on me
Let the Deadbeat Special shine some blight on me
Let the Deadbeat Special shine some blight on me
Let the Deadbeat Special shine a ever loving blight on me.

Yonder come miss Rosie, how in the world did you know?
By the way she wears her apron, and the clothes she wore.
Umbrella on her shoulder, piece of paper in her hand;
She come to see the banker, she wants a workout plan.

Let the Deadbeat Special shine some blight on me
Let the Deadbeat Special shine some blight on me
Let the Deadbeat Special shine some blight on me
Let the Deadbeat Special shine a ever loving blight on me.

“Photos: Bank-owned homes in foreclosure Across South Florida, from Miami to West Palm Beach, some of the world’s largest banks and mortgage lenders have taken title to hundreds of foreclosed houses only to let them deteriorate, repeatedly violating local health and safety laws set up to protect property values and prevent the spread of blight.”

Only to let them deteriorate? I got news for ya, these houses were already deteriorated before somebody loaned, bought, sold or refied them for $200k to $400k between 2004 and 2006. And I don`t see anybody screaming I`ve been Robo signed or fighting the evil banksters to stay in or save these Rat Traps.

these houses were already deteriorated before somebody loaned, bought, sold or refied them for $200k to $400k between 2004 and 2006.

Yeah, most of them look like they are in crappy neighborhoods to me, too. One has a decent house next to it, but that could just be one of the many nicer houses that were built in crappy neighborhoods all over Florida, in the expectation that the area would turn around as RE skyrocketed- I know an idiot who did just that.

Also the slide show would be more informative if it wasn’t 29 pictures of maybe 4 different houses.

Bank-owned homes
( Michael Laughlin, Sun Sentinel / April 18, 2012 )
Aldame Edward is homeless and has been sleeping on the front porch of this home at 1032 NW Fourth Ave. in Fort Lauderdale. The foreclosed home is owned by Deutsche Bank, which has failed to maintain the home’s appearance.

A Palm Beach County foreclosure­-rescue company is acquiring distressed homes and renting them out, but some home­owners association leaders say it’s not paying the dues vital for community upkeep.

The for-profit Nationwide Investment Firm, which recently moved its Boca Raton headquarters to a Flagler Drive office in downtown West Palm Beach, has homeowners quit claim-deed their properties to the company with promises to broker a short sale, while also defending the case in court.

Homeowners, who remain on the hook for the mortgage while no longer owning the home, have filed several lawsuits against Nationwide, complaining they unwittingly gave away their property without receiving the help they sought.

And community associations say there’s a deeper ripple effect in neighborhoods where Nationwide seeks to put tenants in homes without association approval or paying fees required for maintenance, security, landscaping and other services.

Associations trying to recoup delinquent fees have filed tens of thousands of dollars in liens against Nationwide and properties deeded to the firm.

Nationwide President Guilfort Dieuvil, a licensed Realtor, said his company is working with the associations to settle the bills.

“We are doing a negotiation with the HOAs, plain and simple,” he said.

Brittany O’Bair said she didn’t find out until after she put down a $900 deposit and settled into a home at the Palm Lake condominiums that Nationwide hadn’t sought approval from the association and owed more than $2,300 in delinquent fees, according to a lien filed in September.

“When I told the association manager what unit I was living in, she was shocked,” O’Bair said. “She said, ‘You’re not even supposed to be on this property.’ ”

The association liens range in amounts from several hundred dollars to $12,598 on a Green Terrace condominium unit that was deeded to Nationwide in June 2011. Green Terrace, which is off Belvedere Road in West Palm Beach, filed for foreclosure against Nationwide April 2.

Mexicans have stopped pouring into the United States, the study says, and the net numbers even indicate that they’re going back home. More than half of Mexican-born people in the U.S. are illegal, and Mexicans make up nearly 60 percent of all illegal immigrants here.

Their migration, over 40 years, is the largest immigrant wave in terms of numbers in U.S. history.

The Farmworker Association says the number of farmworkers in Immokalee at peak season has decreased from 22,000 in 2000 to 12,000 today.

Labra, 30, said one reason is that tomato growers have decreased the acreage they plant because it has been harder to turn a profit. Some of the increased competition they are facing is coming from Mexico, which exports tomatoes to the U.S. Some employers that formerly operated in the Immokalee area have moved their operations to Mexico and Central America, Labra said.

“I know some people who lost their jobs moved to other parts of the United States, and I know other people who have returned to Mexico,” he said. He didn’t know whether the people who picked tomatoes in Florida are now doing the same in Mexico .

Less urgency to emigrate

In 1960 the average Mexican woman bore 7.3 children. By 2009 that figure had plummeted to 2.4 children.

“That’s a dramatic change in demographics,” Abraham said. “When you have fewer mouths to feed, that leads to less of a need to send someone from the family north looking for work.”

I think the only ones “going back” are the ones who were actually working the low paying- labor intensive jobs and not the ones who have figured out how to game the system. I doubt there is any decreased demand on social services even with these “election year numbers” of reverse migration. Those ones are still here - fat and happy!

Maybe more true than you know. There are noticeably less what appear to be illegal immigrants in Jupiter Fl. than there were 2 or 3 years ago yet Jerry Thomas Elementary School in the heart of Jupiter still looks like your in Mexico before and after school. The only thing I can figure is an illegal immigrant worker with no kids does not qualify for any govt. benefits while an illegal immigrant couple with 2 or 3 American citizen kids does.

I’m happy to report that our rent payments are helping to keep a Mexican labor crew gainfully employed right in our backyard and at other homes in the neighborhood. Our landlady pays them to stop by and do yardwork four times a month. They do a beautiful job, and I am sure it is at a fraction of my willingness to pay for avoiding the pain of yardwork.

I think the only ones “going back” are the ones who were actually working the low paying- labor intensive jobs and not the ones who have figured out how to game the system. I doubt there is any decreased demand on social services even with these “election year numbers” of reverse migration. Those ones are still here - fat and happy!

I suspect we’re near the end of the immigration wave anyway. Even if the US wasn’t losing jobs, we’re close to a saturation point on the low-skill jobs that are left. I haven’t seen an American yardworker or housecleaner or burger flipper or unskilled construction worker in a long time. We dont need new illegals to fill those jobs because illegals already have those jobs. And all those lucky ducky illegals now have Spanish/English-speaking citizen kids , many in their late teens. They will glady take those jobs for minimum wage.

Hello Jeff, glad to see you. Have not seen you in a while. It makes me laugh when I see comments by Joe that believe people like myself and system player are the reason this country is in this situation. It shows me how ignorant people in this country really are. Good luck to you and your kids, Jeff. My day will come to an end and I will have to get back into the real world like yourself, so keep praying for that day and I will keep living lavida loco and preparing for that day.

diver4life
11:53 AM, 4/29/2012

Hey diver4life

You should teach a course. Not saying it`s your fault, you are being allowed to do this. How are your kids doing? Mine are not doing so well, if I had the $74,800 I have paid in rent in the last 44 months to LLs who do not pay the mortgage I could take care of several of their problems.

I want to put on my my my my my
Deadbeat shoes
And live free like you, yeah
I want to put on my my my my my
Deadbeat shoes and live free like you, uh huh

jeff saturday
11:16 AM, 4/28/2012

Hey, I am not participating in this program. So don’t be upset with me. You can call me a deadbeat, but I have lived in my home for 44 months without a mortage payment and I am not even in foreclosure. So Big Daddy and all the others, I am not taking your tax dollars but you can KMA, I will do what is best for me, not you…….
diver4life
10:40 AM, 4/28/2012

“underemployed homeowners to turn their lives around.”?? So now we continue at election time to buy votes with government money for the people that shouldn’t have purchased a house that they can’t afford to begin with. Ever heard of throwing good money after bad? I know how to manage money, don’t buy things I can ill-afford, and know that when the house needs maintenance or new appliances, I don’t have the money to do that. So I rent.

Get the message America, Live within your means!!
Big Daddy
2:09 AM, 4/28/2012

What a complete waste of tax money. My tax dollars shouldn’t be going towards someone else’s mortgage payment. They should have never bought a house they can’t afford

“I have lived in my home for 44 months without a mortage payment and I am not even in foreclosure.”

Ben mentioned something above about asset managers trying to maximize returns. How does that work on an ‘investment property’ that shows no ‘returns’ over a 44 month period? Wouldn’t the ‘return’ improve if the deadbeat were kicked out and the property were resold to a financially solvent owner?

Maybe if they were on cash method accounting, it would, bu they aren’t. They are on accrual accounting. That means that they accrue the income based on having performed the service required to earn it. Having the mortgage outstanding (lending the money) is the action required to earn the money, so under their system they do have income.

Since the loan is outstanding, and they are on the accrual method of accounting, those 44 months of missed payments show up on the balance sheet as accrued income.

What could possibly go wrong with this sort of accounting practice?

(Comments wont nest below this level)

Comment by alpha-sloth

2012-04-29 14:27:58

those 44 months of missed payments show up on the balance sheet as accrued income.

Where’s the cash, though? Not in the hands of the investors. So I also don’t quite see how it works.

Comment by polly

2012-04-29 14:53:05

Well, back when the loans were secured by houses with loan to value ratios of no more than 80% and a geographically diversified portfolio of home loans would rarely have more than a few that lost enough value for the foreclosure, it didn’t go wrong at all. It didn’t make sense for all the income to rush in when the foreclosure sale went through.

When you stop underwriting the loans and a credit bubble temporarily inflates the value of the houses beyond any possible long term value, you have a problem.

“Lol- diver4life is so cool. Why don’t you invite him over to the hbb, Jeff? He’d be a fun addition.”

You know why I like him, he doesn`t throw out any of the “I`m a victim” “I was Robo signed” He doesn`t make any excuses, he `s just riding it for all it`s worth and he is honest about it.

Where I do disagree with him is his ” I am not taking your tax dollars but you can KMA,” attitude. I don`t know where my tax dollars have gone but I know they are gone and I think the diver4lifes and the crooked banksters might have something to do with the printing press going into overdrive which has helped to give all of us $4 gas and ever increasing grocery and electric bills not to mention inflated house prices, rents and massive debt for future generations.

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Written by Lily Leung
12:01 a.m., April 28, 2012
Updated 10:29 p.m. , April 26, 2012
…
Last month, the county saw its highest home-sale count for a given March in six years and prices bumped up 5.1 percent from February to $320,500. In the latest S&P/Case-Shiller Index report, San Diego was one of three metro areas that saw positive month-to-month returns. Question: Do both reports signal a bottoming out of the San Diego County housing market?

Our panel’s answers.
…
Yes: Well, technically no. The actual bottom of the market, or inflection point, for San Diego appears to have occurred in the fourth quarter of 2011. What the latest March figures represent are statistics of an improving market on an upward trend, not one turning the corner. How can I make this claim? Our monthly and annual sales are forecast on our best available information at the time — and our forecasting was performed in 2011. Year-to-date we have exceeded our forecast consistently, and we seem to be gaining momentum. Simply put, we are selling more homes and prices are modestly increasing — perfect evidence of improvement.
…

The last few years have been particularly rough on the nation’s housing sector, and few people feel that as sharply as Jerry Howard.

“It’s no secret that our organization reflects our industry, and our industry’s been going through some tough times,” said Howard, who became the chief executive of the National Association of Home Builders more than a decade ago.

He held that post when the housing boom looked like it might never end, and when the bubble burst.

The mortgage crisis was central to the 2008 economic collapse, and now Howard and other advocates are pressing to rebuild the housing sector to help spur the current recovery. At the same time, the housing lobby also has to deal with public relations problems that would have seemed unthinkable five years ago.

Both Republicans and Democrats, for example, are taking aim at the struggling mortgage titans Fannie Mae and Freddie Mac, with Howard going so far as to joke that “if Santa Claus had two elves, one named Fannie and one named Freddie, America would be anti-Christmas.”

Some GOP lawmakers have proposed getting the government totally out of the mortgage business. But Howard — and many other policymakers, for that matter — say that while there needs to be a winding down of Fannie Mae and Freddie Mac, there is still plenty of room for the government in the housing finance system.

“The sins of the past have to be guarded against,” Howard said. “What we think should be done is a housing finance system reinvented that maintains the government guarantee in situations where there could be catastrophic occurrences.”

Moreover, the NAHB, where Howard has worked for more than two decades, has gone through some turmoil of its own in recent years, with scores of staffers heading for the exits. Large builders have also formed a new association, even as they remained members of NAHB.

“But I could never have abandoned it in the tough times and walked away from it,” he said. “I’m enough of an old Boy Scout to want to leave a place in as good or better condition than when I found it.”

Still, Howard knows that it will take a heavy lift to get the housing industry back on solid footing.

Housing has yet to emerge as a key issue in this year’s election, even as the economy has taken center stage in the campaign. At the same time, policymakers are expected to get little substantive work done on housing and other issues before November’s election.

But even as he sets up his plan for potential policy battles down the line, Howard remains confident the housing sector will remove the stain of the last few years, brandishing poll results that say a strong majority of voters want tax incentives for homeowners and the government to help those seeking mortgages.

“Nothing is permanent,” Howard told The Hill in a wide-ranging interview at the NAHB offices. “The American people still view homeownership as their best potential long-term investment, as a symbol for their personal success and as one of the most important goals of their lives.”

Howard brings practically a lifetime of experience to the current debate, growing up with a father who was a developer.

“The way that our members think is exactly the way my dad thought,” Howard told The Hill. “And the topics that they would talk about in our meetings are the same topics we talked about around our dinner table.”
…

I’m assuming these are average prices, or median, but not comparisons of individual home sales. As such, the best way to see the data is to pick out the markets with the most recent sales (to minimize a skewed sample).

The three markets with the most current sales are showing virtually no improvement from the trough on price terms.

Small numbers of sales could easily be skewed by the type of unit mix.

The only thing this data shows me is that there are more sales generally, and more higher priced homes are selling generally. Does this mean prices are going up? I wouldn’t say so based on looking at the zip codes with the most sales.

If you’re one of the estimated 11 million homeowners burdened with an underwater mortgage, a new federal policy change could be good news: Starting in June, when you want to do a short sale to shed your mortgage debt load and avoid foreclosure, you may not have to wait for months to hear back from your bank when you submit an offer from a potential purchaser.

Instead, if your loan is owned or securitized by either of the dominant conventional mortgage market players – Fannie Mae or Freddie Mac – you can expect a response within 30 business days, with a final decision no later than 60 days. If you don’t hear back during the first 30 days, the bank will be required to send you weekly updates telling you precisely where the holdups are and when they are likely to be resolved. None of this is typical of short-sale procedures today. Banks and servicers who don’t comply will face monetary and other penalties.

The mandatory timelines, which real estate and mortgage industry experts say should help speed up what traditionally has been a glacial process, are being imposed by the Federal Housing Finance Agency, the regulatory overseer of Fannie and Freddie in conservatorship. Short sales represent an important alternative to foreclosure, and involve the lender or loan servicer agreeing to accept less than the full amount owed by the borrower.

Though they can be complex and messy and can take anywhere from several months to more than a year to complete, short sales are turning into a mainstay of the real estate market. According to a report from the foreclosure data firm RealtyTrac, short sales jumped by 33 percent in January compared with the same month the year before. In 12 states – including California, Arizona, Colorado, Florida, New York and New Jersey – there were more short sales recorded during January than sales of foreclosed properties.

This trend is welcome, say regulators, but the total time required to complete short sales is still far too long. The 30-day and 60-day mandates address just one of the key points of delay in the process, but regulators promise a series of additional steps during the coming months designed to speed transactions. They include clearer guidelines on borrower eligibility, property valuations, compensation for lenders holding second liens, and mortgage insurance issues. All of these are points of friction that can delay short-sales agreement for weeks or months.
…

By any measure, the Spanish real estate boom was one of the headiest ever. Spurred by record-low interest rates, Spaniards piled into holiday villas along the Costa Blanca, gaudy apartments in Madrid and millions of starter homes throughout the country.

But since the frenzy drove Spanish home prices to a peak in 2007, they have fallen by at least one-fourth, and the bottom seems nowhere in sight. As Spain endures its second recession in three years and unemployment nears 25 percent, an increasing number of debt-heavy Spaniards can no longer meet monthly payments on the mortgages that their banks were all too eager to give.

With a rising portion of Spain’s 663 billion euros, or $876 billion, in home mortgages at risk of default, many economists say it is only a matter of time before some of Spain’s biggest banks will need a bailout. And the Spanish government, staggering under its own debt and budget deficit burdens, may not have the money to come to the rescue.

“The govt backs 90%+ of the loans, because the market knows this paper is just as bad as 2005. Interest rates and underwriting standards are kept low, by the govt, to suck in people who shouldn’t qualify.”

Amen. This has been like watching paint dry…a steady stream of government programs, anything to keep hope alive and those monthly mortgage payments coming in to the TBTF banks.

It’s principal-writedown day today! Jesse Eisinger has uncovered a huge story: that internal analyses at both Fannie Mae and Freddie Mac show that reducing principal on troubled mortgages has a “positive net present value”. That of course directly contradicts the testimony of Frannie’s regulator, Ed DeMarco — but it’s now going to be much harder for DeMarco to maintain his position that principal reductions would never help Frannie’s finances.
…
Comments
18 comments so far | RSS Comments RSS
Mar 23, 2012
1:17 pm EDT

Always Felix Salmon repeating the lies of NPR/ProPublica to harass Fannie and Freddie.